Chapter 11

Basic price adjustments known as​ __________ are used to reward customers for certain responses. A. discounts and allowances B. psychological prices C. discounts and allocations D. ​location-based pricing E. segmented prices

A. discounts and allowances

In​ __________pricing, the company sells a product or service at two or more​ prices, even though the difference in prices is not based on differences in costs. A. segmented B. discount and allowance C. promotional D. dynamic E. psychological

A. segmented

A company has set a low price on a new product it introduced. They want to maximize their market share and attract a large number of buyers quickly. Which new product pricing strategy should the company​ use? A. ​Market-penetration pricing B. ​Market-skimming pricing C. ​Captive-product pricing D. Optional product pricing E. Psychological pricing

A. ​Market-penetration pricing

Many amusement parks charge a daily ticket or season pass charge plus additional fees for food and other​ in-park features. This is called​ __________. A. ​two-part pricing B. ​product-bundle pricing C. ​optional-product pricing D. ​by-product pricing E. product line pricing

A. ​two-part pricing

__________ occurs when retailers set an artificially high​ "regular price" and then advertise a​ "sale price" which is actually close to their everyday price. A. Predatory pricing B. Deceptive pricing C. Retail price maintenance D. Price fixing E. Price discrimination

B. Deceptive pricing

Which of the following statements is true concerning new product pricing​ strategies? A. A​ market-penetration strategy should be used if the market is not highly price sensitive. B. For a​ market-skimming strategy to be​ successful, the costs of producing a smaller volume cannot be so high that they cancel the advantage of charging more. C. When using a​ market-skimming strategy, marketers do not need to focus on the​ product's quality and image. D. If competitors can easily enter the​ market, a​ market-skimming strategy should be used. E. For a​ market-penetration strategy to​ work, production and distribution costs must increase as sales volume increases.

B. For a​ market-skimming strategy to be​ successful, the costs of producing a smaller volume cannot be so high that they cancel the advantage of charging more.

Promotional pricing tactics include​ __________. A. ​customer-segment pricing,​ location-based pricing, and​ time-based pricing B. ​discounts, special-event​ pricing, and limited time offers C. functional​ discounts, limited time​ offers, and​ location-based pricing D. ​discounts, geographical​ pricing, and​ special-event pricing E. ​discounts, limited time​ offers, and reference prices

B. ​discounts, special-event​ pricing, and limited time offers

Many personal care companies combine toothpaste with a toothbrush at a reduced price. This is an example of​ __________ pricing. A. ​two-part B. ​product-bundle C. ​captive-product D. product line E. ​by-product

B. ​product-bundle

Which of the following statements regarding public policy and pricing is​ correct? A. Companies are usually free to charge whatever prices they wish. B. Federal statutes apply to both interstate and intrastate commerce. C. Companies​ can, under some​ circumstances, price items below cost. D. It is legal in some industries for sellers to collude with competitors when setting prices. E. Sellers are allowed to punish dealers who do not price a product at the​ manufacturer's suggested retail price​ (MSRP).

C. Companies​ can, under some​ circumstances, price items below cost.

Which of the following statements regarding segmented pricing is​ correct? A. For segmented pricing to be​ effective, the segments should have the same degree of demand. B. Different locations are not used as a basis for segmented pricing. C. Segmented pricing practices can cause consumer resentment. D. Perceived value does not have to be considered when using segmented pricing. E. Segmented pricing is not used to price different versions of a product.

C. Segmented pricing practices can cause consumer resentment.

What is the purpose of the​ Robinson-Patman Act? A. To prevent deceptive pricing B. To prevent scanner fraud C. To prevent unfair price discrimination D. To prevent price fixing E. To prevent predatory pricing

C. To prevent unfair price discrimination

When would a competitor most likely react to a​ firm's price​ change? A. When the number of firms involved is large B. When buyers are not well informed about the product C. When the number of firms involved is small D. When buyers are not well informed about prices E. When the product is differentiated

C. When the number of firms involved is small

Assume a competitor has cut prices and a company determines they should respond. Effective actions that the company could initiate include​ __________. A. raising prices B. improve quality and decrease prices C. launch a​ low-price fighter brand D. reducing perceived value E. decrease quality and increase prices

C. launch a​ low-price fighter brand

Cheese makers in Wisconsin sell their leftover brine to local city and county highway​ departments, which use it in conjunction with salt to melt icy roads. Which product mix pricing strategy does this​ represent? A. ​Optional-product pricing B. ​Product-bundle pricing C. ​By-product pricing D. Product line pricing E. ​Two-part pricing

C. ​By-product pricing

Gillette charges a fairly low price for their razors​ (relative to​ costs) and a high price for razor blades. They are using a strategy of​ __________ pricing. A. ​two-part pricing B. product line C. ​captive-product D. ​by-product E. ​product-bundle

C. ​captive-product

Companies that make products that must be used along with a main product are using​ __________. A. product bundle pricing B. product line pricing C. ​captive-product pricing D. ​optional-product pricing E. ​by-product pricing

C. ​captive-product pricing

Market skimming prices are preferred in all of the following conditions except​ __________. A. the costs of producing a smaller volume cannot be so high that they cancel the advantage of charging more B. competitors should not be able to enter the market easily and undercut the high price C. enough buyers must want the product at that price D. an initial low price is set by the companies E. the​ product's quality and image must support its higher price

D. an initial low price is set by the companies

Margaret has been invited to a fancy dinner party and wants to bring a good bottle of wine as a gift for the host. Because she does not know much about​ wine, she will likely use the price of the wines as​ a(n) __________. A. indicator of the cost of production B. indicator of geographic pricing C. type of segmented pricing D. indicator of quality E. limited time offer

D. indicator of quality

Techniques that can be used by sellers for avoiding​ customers' perception of price gouging includes all of the following except​ __________. A. maintaining a sense of fairness surrounding any price increase B. price increases should be supported by company communications telling customers why prices C. the company should consider ways to meet higher costs or demand without raising prices D. rationing products to customers E. the company can shrink the product or substitute​ less-expensive ingredients instead of raising the price

D. rationing products to customers

When Apple Computer Company introduced their​ iPhone, they priced the new product at​ $599, considerably higher than either their iPod or competing cellular phones. Apple Computer was pursuing​ a(n) __________ pricing strategy. A. ​optional-product B. ​captive-product C. ​market-penetration D. ​market-skimming E. ​by-product

D. ​market-skimming

Federal legislation on​ __________ states that sellers must set prices without talking to competitors. A. ​trade-restrain B. discriminatory pricing C. deceptive pricing D. ​price-fixing E. interstate commerce

D. ​price-fixing

Which of the following statements regarding dynamic pricing is​ correct? A. Because of dynamic​ pricing, online consumers no longer compare prices. B. Dynamic pricing is only effective when used online. C. The dynamic pricing tactic of surge pricing is legally questionable. D. Dynamic pricing benefits only consumers. E. Dynamic pricing could cause consumer resentment and damage customer relationships.

E. Dynamic pricing could cause consumer resentment and damage customer relationships.

Whirlpool washers and dryers are offered in many different models. Whirlpool will use​ __________ pricing to determine the price steps between the different models. A. ​two-part pricing B. ​optional-product C. ​captive-product D. ​product-bundle E. product line

E. product line

One major objective of a​ market-penetration pricing strategy is to​ __________. A. set a high price to gain profits B. prevent customer dissatisfaction C. attract buyers willing to pay a higher price D. skim off small but profitable segments E. win a large market share

E. win a large market share